emirates nbd...largest financial institution in dubai, 3rd largest in the gcc leading retail banking...

Presentation Title 1

Emirates NBDInvestor Presentation

April 2020

2

Important Information

Disclaimer

The material in this presentation is general background information about Emirates NBD's activities current at the date of the

presentation. It is information given in summary form and does not purport to be complete. It is not intended to be relied upon as

advice to investors or potential investors and does not take in to account the investment objectives, financial situation or needs of any

particular investor. These should be considered, with or without professional advice when deciding if an investment is appropriate.

The information contained here in has been prepared by Emirates NBD. Some of the information relied on by Emirates NBD is

obtained from sources believed to be reliable but does not guarantee its accuracy or completeness.

Forward Looking Statements

It is possible that this presentation could or may contain forward-looking statements that are based on current expectations or beliefs,

as well as assumptions about future events. These forward-looking statements can be identified by the fact that they do not relate only

to historical or current facts. Forward-looking statements often use words such as anticipate, target, expect, estimate, intend, plan,

goal, believe, will, may, should, would, could or other words of similar meaning. Undue reliance should not be placed on any such

statements because, by their very nature, they are subject to known and unknown risks and uncertainties and can be affected by

other factors that could cause actual results, and the Group’s plans and objectives, to differ materially from those expressed or implied

in the forward-looking statements.

There are several factors which could cause actual results to differ materially from those expressed or implied in forward looking

statements. Among the factors that could cause actual results to differ materially from those described in the forward-looking

statements are changes in the global, political, economic, business, competitive, market and regulatory forces, future exchange and

interest rates, changes in tax rates and future business combinations or dispositions.

Emirates NBD undertakes no obligation to revise or update any forward looking statement contained within this presentation,

regardless of whether those statements are affected as a result of new information, future events or otherwise.

3

1. Emirates NBD Profile2. Financial & Operating Performance3. Economic Environment4. Divisional Performance

7

4

Emirates NBD is a Leading Bank in the MENAT Region

*Market cap as at 27-Apr-20; **By assets as at 31-Mar-20

***Market share in UAE as at Q1-20

Key Highlights as of Q1 2020

Emirates NBD at a Glance

AED 692 BnTotal Assets

AED 474 BnGross Customer Loans

AED 52.4 BnMarket Capitalization*

13Countries

970Branches

14.7 million Customers

2nd

Largest in the UAE**

3rd

Largest in GCC**

~20%Market Share in UAE (Assets, Loans, Deposits)***

20%Foreign

Ownership Limit

56%Government of Dubai

Shareholding

40%Intent to Further Increase

Foreign Ownership Limit

Emirates NBD Profile

5

Emirates NBD at a glance

Emirates NBD’s International Presence

Turkey

KSA

London

Singapore

Jakarta

Beijing

UAEMumbai

Germany

1

1

1

467

Egypt

16

708

1

143

Bahrain

Austria

Emirates NBD

Emirates NBD Rep. Offices

DenizBank

1

1

27

Market share in the UAE*

Assets 18.2%; Loans 22.2%;

Deposits 20.5%

Largest financial institution in

Dubai, 3rd largest in the GCC

Leading retail banking franchisewith a branch network of around 1,000

branches throughout the MENAT

region with operations in 13 countries

Leader in digital banking: 6th best

banking app worldwide with expanding

customer acquisition

55.8% indirectly owned by the

Government of Dubai through ICD

Stable credit ratings

Rated A3 / A+ by Moody’s / Fitch

* ENBD as at 31-Mar-20 excluding DenizBank Emirates NBD Profile

1

Moscow

6

% Mar-20 vs. Mar-19


Total AssetsAED Bn, 31-Mar 2020

Gross LoansAED Bn, 31-Mar 2020

Total DepositsAED Bn, 31-Mar 2020

Net ProfitAED Bn, Q1 2020 YoY

188

393

474

724

20%

6%

30%

13%

200

467

497

713

22%

30%

15%

11%

276

692

835

974

19%

32%

14%

9%

Emirates NBD is one of the largest banks in the GCC

1.1

2.1

2.4

3.6

-18%

-24%

-22%

0%

7

9.7 9.9 10.2

11.8

14.415.2 14.7

15.4

17.4

22.4

6.9

2.3 2.5 2.63.3

5.1

7.1 7.28.3

10.0

14.5

2.1

2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 Q1 2020

Operating Revenue (AED Bn) Net Profit (AED Bn)

Strong track record of profitability

Consistently profitable due to diversified and resilient business model

Return on Average Tangible Equity


9.3% 8.8% 15.7% 19.7% 18.0% 20.3%9.1% 18.7%10.5% 24.2% 12.0%

Record year for

revenue and profit

8

Stable Shareholder Base and Diversified Business Model

HighlightsSplit of ownership – Anchored by the Government of Dubai

Balanced asset composition

Investment

Corporation of Dubai (“ICD”)

56%

Others

39%

Capital Assets

5%

% by segment as at 31 March 2020

Ownership structure as at 31 March 2020


• A flagship bank for the Government of Dubai and the UAE

• Strong and supportive shareholder base from the Government of

Dubai via Investment Corporation of Dubai

• International presence in Asia, Europe and MENAT across 13

countries. DenizBank acquisition further enhanced geographic profile

• Well diversified and balanced asset composition between corporate,

consumer and Islamic banking

• Foreign ownership limit raised to 20% from 5% in September 2019

• Intent to raise Foreign ownership limit to 40%, subject to Regulatory

approval

Equity Analysts Coverage

Buy Hold Sell

Recommendation 10 1 0

In AED

Target Price 12.00

Price at 27-Apr-2020 8.30

Adjusted EPS 31-Mar-2020 0.31

CIB47%

DenizBank19%

GMT16%

RBWM9%

Islamic Banking9%

9

• The lifestyle digital bank for millennials - launched its innovative

digital credit card offering a truly customized experience

• Commenced pilot operations in the Kingdom of Saudi Arabia,

a large market with a young and dynamic population

• In partnership with AECB, now enables instant access to credit

scores to help customers for a healthier financial future

• Sure, Smartphone insurance – range of insurance products

• Expanded range of services with international transfers

• UAE’s fastest growing retail bank; +12,000 customers p/month

• Continues to attract an overwhelming base of millennials as their

primary spend account; Strong customer engagement

• Crossed 370,000 customers – Google Play Store rating 4.4 / 5


Leader in Digital Banking and Innovation

Key Digital

Developments

• Committed to continue with safe operations during C-19 situation

• Instant mobile account opening without the need to visit a branch

now represent 23% of customer accounts openings for Emirates NBD

• Introduced new touchpoint with Voice Banking on Amazon Alexa

• 70% of corporate clients opt for our award-winning digital platform

• New contactless sales processes rolled out for retail loans, cards

• Chat Banking service via WhatsApp simplifies banking experience

• Announced the launch of our digital business bank E20.

94%

Transactions via

digital channels

Disability friendly

Branch Network

52%

Retail Business

customers digitally active

72%

10

Emirates NBD maintains strong balance sheet and good profitability despite increased impairments in Q1-20

Key Metrics 2020 Macro themes

Financial & Operating Performance

Q1 20202020

Guidance

Profit

Net ProfitAED 2.1 Bn+3% q-o-q -24% y-o-y

NIM 3.02% 2.55-2.65%

Cost to income 29.8% 33%

Credit QualityNPL Ratio 5.5% Increasing

Coverage Ratio 120.5% Strong

Capital

CET 1 14.8%

Tier 1 16.8%

CAR 17.9%

LiquidityLCR 149.7%

ADR 94.8% Increasing

Assets Loan Growth 1%mid-single

digit

Regional Global

• Strong regulatory and government support to mitigate effects of COVID-19

• Strong measures byGovernments and Central Banks to provide additional liquidity and supportfor businesses affected by COVID-19

• Unprecedented economic impact expected due to COVID-19

• Prolonged low oil price and contraction in non-oil private sector

• Sharp GDP contraction expected in 2020

• Financial market volatility and slowing global trade

11

Q1 2020 Financial results highlights

Highlights Key performance indicators

• Net profit of AED 2,081 Mn was down 24% y-o-y, or 43% excluding

DenizBank, mainly due to higher provisions. Net profit up 3% q-o-q

• Results include DenizBank revenue of AED 2,255 Mn and net profit

of AED 504 Mn

• Net interest income improved 45% y-o-y on loan growth and higher

NIMs from DenizBank and declined 3% q-o-q as lower interest rates

fed through to the loan book

• Excluding DenizBank net interest income declined 1% y-o-y on

lower interest rates in Q1-20 partially offset by 6% loan growth

• NIMs of 3.02% improved 19 bps y-o-y helped by the positive impact

from DenizBank and declined 9 bps q-o-q

• Non-interest income improved 48% y-o-y and 8% q-o-q on account

of higher core fee income

• Excluding DenizBank non-interest income declined 4% y-o-y due to

lower fee, commission and investment securities related income

• Costs increased 47% y-o-y due to the DenizBank acquisition, or

increased 2% excluding DenizBank

• Costs improved 18% q-o-q on lower staff and marketing expenses

and improved cost management by DenizBank

• Impairment allowance of AED 2,558 Mn increased 349% y-o-y and

24% q-o-q due to higher stage 1 and 2 ECL allowances. Excluding

DenizBank impairment allowances increased 177% y-o-y

• NPL ratio settled at 5.5% in Q1-20

• LCR of 149.7% and AD ratio of 94.8% demonstrate the Group’s

healthy liquidity position

• Net cost of risk increased to 210 bps in recognition of the potential

deterioration in credit quality in subsequent quarters related to the

COVID-19 pandemic

AED Bn 31-Mar-20 31-Mar-19 % 31-Dec-19 %

Total assets 691.7 525.8 32% 683.3 1%

Loans 443.0 337.7 31% 437.4 1%

Deposits 467.2 359.4 30% 472.2 (1)%

LCR (%) 149.7% 198.8% (49.1)% 160.0% (10.3)%

ADR (%) 94.8% 94.0% (0.8)% 92.6% (2.2)%

NPL ratio (%) 5.5% 5.9% 0.4% 5.6% 0.1%

AED Mn Q1-20 Q1-19Better /

(Worse)Q4-19

Better /

(Worse)

Net interest income 4,936 3,400 45% 5,065 (3)%

Non-interest income 1,948 1,317 48% 1,812 8%

Total income 6,885 4,717 46% 6,877 0%

Operating expenses (2,049) (1,397) (47)% (2,501) 18%

Pre-impairment operating

profit 4,836 3,320 46% 4,377 10%

Impairment allowances (2,558) (570) (349)% (2,064) (24)%

Operating profit 2,278 2,750 (17)% 2,313 (2)%

Share of profits from

associates0.1 27 (100)% 2 (94)%

Gain on bargain purchase - - n/a (50) n/a

Taxation charge (197) (34) (479)% (245) 20%

Net profit 2,081 2,743 (24)% 2,020 3%

Cost: income ratio 29.8% 29.6% (0.2)% 36.4% 6.6%

Net interest margin 3.02% 2.83% 0.19% 3.11% (0.09)%


12

Net interest income

• Q1-20 NIM of 3.02% increased 19 bps y-o-y as higher margins from

DenizBank coupled with improved deposit and funding costs offset the

reduction in loan yields

• Excluding DenizBank, Q1-20 NIM of 2.56% declined 27 bps y-o-y as

lower loan yields offset the benefit from lower deposit cost

• NIM declined 9 bps q-o-q as the reduction in loan yields and DenizBank

margins offset the impact of lower deposit cost

• Loan yields declined 70 bps y-o-y and 22 bps q-o-q which offset the

improved deposit cost of 28 bps y-o-y and 15 bps q-o-q

• NIM guidance revised down to 2.55-2.65% as recent decline in interest

rates start to flow through to the loan book in subsequent quarters and

DenizBank assets reprice

Q1-20 vs. Q1-19 Q1-20 vs. Q4-19

Net Interest Margin (%)

Net Interest Margin Drivers (%)

Highlights

0.15

(0.03)

DenizBank

(0.22)

Q4 19 Loan Yield Deposit

Cost

0.01

Treasury

& Other

Q1 20

3.11

3.02

2.68

Q1 18 Q3 18

3.02

2.89

Q2 18

2.82

2.78

Q1 20

2.87

2.81

Q2 19

2.85

2.82

Q4 18

2.83

Q1 19

2.72

2.77

3.02

2.83

2.82

Q3 19

3.11

Q4 19

Qtrly NIM YTD NIM


0.28

0.15

0.46

Loan Yield Treasury

& Other

Q1 19

(0.70)

Deposit

Cost

ENBD Ex-

DenizBank

DenizBank Q1 20

2.83

2.56

3.02

13

Loan and deposit trends

Highlights Trend in Gross Loans by Type (AED Bn)

• Gross loans grew 2% since start of the year with growth across

operating segments

• Corporate lending grew 3% from end 2019 due to growth in financial

institutions sectors

• Consumer lending down 5% from end 2019 due to decline in credit

cards and private banking activity

• Islamic financing grew 3% from end 2019 due to growth across a

range of sectors

• CASA deposits represent 46% of total Group level deposits

• Domestic CASA engine remains strong at 54% (including Islamic)

Trend in Deposits by Type (AED Bn)

* Gross Islamic Financing Net of Deferred Income

53 54 55 55 56 57 57 58 60

36 37 37 41 42 41 42 43 41

86 87 86

Q4 19Q2 19

355

Q3 19

364

Q1 19 Q1 20

259267 273 279 288

351

252

467 474

Q2 18

343

Q3 18Q1 18

258

Q4 18

365337

266

249

458

+30%

+2%DenizBank

Corporate

Consumer

Islamic*

188 182 176 176 183 183 180 180 190

137 146 159 165 170 177 182 188 178

99 98 93

Q2 18 Q4 18

6

Q3 18

7

472

7

Q1 19

7 7335

Q3 19

6

Q4 19

6

Q1 20

367

Q1 18

467

Q2 19

7 7

468

332 341 348 359

+30%

-1%CASA

DenizBank

Other

Time


14

Loan composition

Net Loans by Geography Q1-20


2%

23%

75%

UAE

GCC

International

93%

5%

UAE 2%

International

GCC

42%

32%

15%

11%

Sovereign

Corporate

Islamic

Retail

34%

37%

16%

Sovereign

Corporate

13%Islamic

Retail

Note: Gross loans include Islamic financing gross of deferred income

**Others include Mining & quarrying (and Agriculture for Islamic Loans)

5%

4%

4%

3%

18%

11%4%

34%

7%Fin Institutions2%

3%

Personal

4%

Services Real estate

AgricultureConstruction

Hotels and restaurants

Manufacturing

Mgmt of Cos

Others **

Sovereign

Trade

2%

Trans. & com.

5%

4%

4%

18%

13%

42%

7% 0%

Agriculture

1%2%

3%

Trans. & com.Construction

Fin InstitutionsHotels and restaurants

ManufacturingSovereign Mgmt of Cos

Others **

Personal

Real estate1%

Services

Trade

1%

Gross Loans by Segment Q1-20 Gross Loans by Sector Q1-20

Net Loans by Geography Q1-19 Gross Loans by Segment Q1-19 Gross Loans by Sector Q1-19

15

Non-interest income

• Core fee income up 46% y-o-y due to the DenizBank acquisition

• Investment securities income declined 36% y-o-y mainly due to

changing interest rates

• Non-interest income higher by 8% q-o-q mainly on account of

higher derivative income

• Excluding DenizBank, non-interest income declined 4% y-o-y

on account of lower fee, commission and investment securities

related income

Highlights Composition of Non Interest Income (AED Mn)

Trend in Core Gross Fee Income (AED Mn)

229 340 308

848 883

1,4171,596 1,425

590 575

583441 766

40

155

Q1 20

40

166

Q1 19 Q2 19

47

Q3 19

43

Q4 19

1,644 1,653

2,2762,420

2,551

52

+55%

+5%

Fee IncomeForex, Rates & Other

Trade financeBrokerage & AM fees


AED Mn Q1-20 Q1-19Better /

(Worse)

Core gross fee income 2,551 1,644 55%

Fees & commission expense (604) (314) (92)%

Core fee income 1,947 1,330 46%

Property income / (loss) (41) (80) 48%

Investment securities & other income 42 67 (36)%

Total Non Interest Income 1,948 1,317 48%

16

• Q1-20 costs increased 47% y-o-y due to the DenizBank acquisition

• Excluding DenizBank, costs increased 2% y-o-y mainly due to higher

depreciation charges and information technology related costs

• Costs improved 18% q-o-q due to lower staff and marketing expenses

and improved cost management by DenizBank

• The cost to income ratio at 29.8% is within 2020 guidance but is

expected to increase during the year on lower expected income

partially offset by further cost management

Highlights Cost to Income Ratio (%)

Cost Composition (AED Mn)

305 322 473834

510140 145

212

293

254

891 903

1,117

1,286

1,209

78

2,501

59

Q1 19

61

Q1 20Q2 19

1,430

Q3 19

87

Q4 19

76

1,397

1,8802,049

-18%

+47%

Staff Occupancy OtherDepreciation & Amortization

Target

31.331.9

32.329.7 30.3

32.1

31.1 31.5

32.933.5

29.6

31.3

36.4

29.8

Q1 18 Q3 19Q2 18 Q1 19Q3 18 Q4 18 Q2 19 Q4 19 Q1 20

CI Ratio (YTD) CI Ratio

Operating costs and efficiency


17

• During Q1-20 NPL ratio stable at 5.5%

• Coverage ratio improved significantly by 8.2% to 120.5% on higher expected

credit loss overlay related to COVID-19

• Net cost of risk increased to 210 bps (430 bps for DenizBank and 161 bps

Emirates NBD only) on higher net impairment charge of AED 2,558 Mn

• AED 356 Mn of write backs & recoveries in Q1-20 compared to AED 331 Mn

during same period last year

• Stage 1 & 2 ECL allowances amount to AED 10 Bn or 2.6% of CRWA

• Provisions will be reviewed regularly as the impact of COVID-19 becomesmore apparent

Impaired Loans* Impairment Allowances

Highlights Impaired Loan & Coverage Ratios (%)

Impaired Loans and Impairment Allowances (AED Bn)

6.0 6.0 5.8 5.9 5.9 5.94.8 5.6 5.5

Q4 18Q1 18

127.9 127.3128.4

Q2 18

127.4

112.3

Q3 19Q3 18 Q1 20

123.9

Q1 19

120.5

125.8

Q2 19

126.6

Q4 19

NPL ratio

Coverage ratio

4.2

15.2

0.8

22.0

Q1 19

15.2

5.4

0.2

15.5

0.85.5

26.1

16.1

0.94.9

Q4 19

21.4 4.3

16.1

0.74.9

Q1 20Q3 19

0.95.4

Q2 19

21.5

26.0 +0%

+22%

Core CorporateDenizBank Retail Islamic

29.2

5.5

20.2

Q2 19

1.2

0.5

22.420.6

5.71.2

Q3 19

1.3

1.2

21.2

5.4

Q4 19

2.1

1.25.7

Q1 20

1.2

28.0

5.7

19.8

26.5

Q1 19

27.1

31.5 +8%

+19%

Credit quality

Financial & Operating Performance*Includes purchase originated credit impaired loans of AED 2.5 bn (Dec-19: AED 3 bn) acquired at fair value

18

Highlights Impairment allowances and Coverage %

Impairment allowances and Stage 1, 2 and 3 Coverage


• Stage 1 coverage ratio improved to 1.2% from 1.1% in Q1-20 as Stage 1

impairment allowances increased to AED 5.2 bn from AED 4.7 bn

• Stage 2 coverage ratio improved to 19.3% from 15% in Q1-20 as Stage 2

impairment allowances increased to AED 4.8 bn from AED 3.6 bn

• Continued strong Stage 3 coverage ratio at 89.3%

• Customers continue to be assessed closely for stage migrations on a

case by case basis under the COVID-19 situation

• The Group has re-assessed scenario weighting to reflect the impact of

current uncertainty in measuring ECLs across portfolios and also applied

additional adjustments for retail exposures to employees of specific

industries most impacted due to COVID-19 such as airlines, hospitality,

retail and tourism

• The increase in the downside weighting of the macro-economic scenario

and the management overlays have resulted in an additional ECL of

AED 878 million for the Group

• The Group has used expert judgement where required to assess the

overlays and will continue to reassess the position and related impact on

a regular basis.

Total Gross Loans (AED Bn)

Q1 2020

4.7

20.9

3.6

2019

4.8

5.2

21.5

29.231.5

Stage 1 Stage 2 Stage 3

*Stage 3 coverage adjusted for purchase originated credit impaired loans acquired at fair value

90.4 89.3

15.0 19.3

1.1 1.2

2019 Q1 2020

ECL Allowances (AED Bn) *ECL to Loan Coverage %

89%5%

6%

Stage 1 Stage 2 Stage 3

89%5%

6%

2019 Q1 2020

19

Capital adequacy

• In Q1-20, capital ratios declined as 2019 dividends and additional

risk-weighted assets more than offset the impact of retained earnings

• Capital ratios remain above original minimum regulatory requirements

of 11% for CET-1 ratio, 12.5% for Tier 1 ratio and 14.5% for CAR ratio

• Capital ratios not expected to weaken materially whilst TESS provides

temporary relief of 3% from minima (1.5% CCB and 1.5% D-SIB)

Highlights Capitalisation

Risk Weighted Assets Capital Movements table

AED Bn CET1 Tier 1 Tier 2 Total

Capital as at 31-Dec-2019 65.4 74.6 4.8 79.4

Net profits generated 2.1 2.1 - 2.1

2019 Dividend (2.5) (2.5) - (2.5)

Interest on T1 securities (0.2) (0.2) - (0.2)

Amortisation of T1 - (0.2) - (0.2)

Other (1.2) (1.3) 0.0 (1.3)

Capital as at 31-Mar-2020 63.6 72.5 4.8 77.3


16.8

20.7 21.2 21.2 20.918.5

17.9

15.6 16.6 15.3 14.8

18.0 17.418.7 18.9 19.8

44.2 47.9 42.6 46.7

65.4 63.6

8.98.9

9.2 8.9

4.8

3.26.5

6.6

54.46.3

58.8

2015 2016 2017 2018 2019

4.8

Q1-20

50.857.7

79.4 77.3

T1T2 CET1 T1 % CAR % CET1

428.5

26.425.7 7.8

263.2217.2

2015

256.2 30.7

9.0

238.8

5.0

2017

118.2

28.0

2016

243.9

2018

125.5

225.4

2019

9.1

Q1-20

9.9

272.0

4.2

30.7

24.1

245.5273.0

430.8

280.9

+1%+75%

Credit RiskOperational Risk

Denizbank Market Risk

20

Funding and liquidity

• Q1-20 LCR of 149.7% and AD ratio of 94.8% demonstrate the Group’s

continuing healthy liquidity

• Liquid assets* of AED 112 Bn as at Q1-20 (18% of total liabilities and

24% of total deposits)

• During Q1-20, AED 9.1 Bn of term debt issued in five currencies

through two public issues and private placements with maturities out

to 20 years

• 78% of the term liabilities maturing in 2020 re-financed during Q1-20

covering maturities through to July; Only AED 2.6 Bn remaining to be

re-financed

Highlights Advances to Deposit and Liquidity Coverage Ratio (%)

Maturity Profile of Debt Issued (AED Bn)Composition of Liabilities/Debt Issued (%)

*Including cash and deposits with Central Banks but excluding interbank balances and

liquid investment securities

6.28.5

9.8

2.6 2.3

4.0

6.0

7.22.1

7.3

2020 2026 -

- 2035

202520242021 2022 2023 Beyond

2035

8.4

15.8 DenizBank

Club Deal

Public & Private Placement

Maturity Profile of Debt/ Sukuk Issued AED 56.0 Bn


152.9 158.7

196.5 195.3 198.8188.8

149.3160.0

149.7

0

50

100

150

200

250

Q4 19Q1 18 Q2 18 Q1 19Q4 18Q3 18 Q2 19 Q3 19 Q1 20

Customer

deposits76%

Banks

9%

Others

6%

EMTNs

7%

Syn bank

borrow.1%

Loan secur.

0.1%

Sukuk

1%

Debt/Sukuk

9%

Liabilities (AED 612.4 Bn) Debt/Sukuk (AED 56.0 Bn)

LCR (Min. limit 100)

93.8 94.495.2

94.3 94.0

92.1 91.892.6

94.8

90

95

100

AD Ratio

LCR (%) AD Ratio (%)

21

7.5 7.5

92.7 96.4

DenizBank Business Overview

Business Overview Financial Highlights


AED Mn** Q1-20 Q4-19Better /

(Worse)

Net interest income 1,571 1,665 (6)%

Non-interest income 684 722 (5)%

Total income 2,255 2,387 (6)%

Operating expenses (627) (833) 25%

Pre-impairment operating profit 1,628 1,553 5%

Impairment allowances (981) (924) (6)%

Operating profit 647 630 3%

Taxation charge (143) (218) 35%

Net profit 504 411 23%

Cost: income ratio 27.8% 34.9% 7.1%

Net interest margin 4.92% 5.06% (0.14)%

Segment breakdown

• DenizBank contributed total income of AED 2,255 million and net profit

of AED 504 million to the Bank for the first three months in 2020

• Operating expenses and impairment allowances amounted to AED 627

million and AED 981 million respectively for the same period

• Total assets of AED 128 billion, net loans of AED 84 billion and deposits

of AED 93 billion at the end of Q1-20

• DenizBank is the fifth largest private bank in Turkey with wide presence

through a network of 752 branches and 3,000+ ATMs

• Operates with 708 branches in Turkey and 44 in other territories

(Austria, Germany, Bahrain)

• Full service commercial banking platform of Corporate banking, Retail

banking and Treasury

• Servicing around 14 million customers, through 14,000+ employees

Net Loans as at 31-Mar-20

134.1 127.7

85.5 84.098.2 92.8

Q4-19 Q1-20

Financial Highlights (AED Bn**)

0,08%

59%

41%

All financial numbers post acquisition (1-Aug-19) include the fair value adjustments, unless otherwise stated.

**Metrics converted to AED using spot / average exchange rate for balance sheet / income statement

Consumer Banking

Corporate Banking

Assets Net Loans Deposits AD Ratio(Unadjusted)

NPL Ratio (Unadjusted)

22

UAE: private sector credit growth slowed down in Q1 2020

• Growth in UAE bank deposits rose 1.3% m/m and 5.9% y/y during

March 2020. Non Resident deposits were up 3.9% m/m in March

while resident deposits were also slightly up 1.0% m/m. Deposit

growth averaged 4.5% in first three months of 2020

• Gross loans rose 1.3% m/m in March 2020 and 5.6% y-o-y while bank

credit growth averaged 4.8% in first three months of 2020. Private

sector credit growth remained modest, reaching 1.3% y/y in March up

0.7% m/m

Highlights Breakdown of UAE bank credit by economic activity

UAE banking market (USD Bn), March 2020*GCC banking market, March 2020

Source: UAE Central Bank, Bloomberg; *ENBD as at 31-Mar-20 excluding DenizBank

Banking Assets USD Bn

Economic Environment

KSA

UAE

Oman

Kuwait

Qatar

79

235

427

713

843

154

102

106

690

396

370

843

498

476

Assets

Deposits

Gross Loans

Emirates NBD Other Banks

90

95

100

105

110

0

2

4

6

8

10

12

Mar-16 Sep-16 Mar-17 Sep-17 Mar-18 Sep-18 Mar-19 Sep-19 Mar-20

AD Ratio (RHS) Bank Deposits (LHS)

Bank Loans (LHS)% y/y %

23

UAE: 2020 GDP forecast revised down

• COVID-19 causing significant economic impact on global economy,

leading to lower GDP growth

• The IMF has revised down the annual UAE GDP growth forecast for

this year to -3.5% compared to 1.3% expected in 2019. However the

uncertainty around the economic impact of C-19 remains high

• Tourism, hospitality, transportation, logistics, trade, construction and

real estate are all anticipated to be adversely affected

• Residential real estate prices have fallen steadily and further softening

is expected during the year

• The OPEC agreement reached in April is expected to result in a sharp

contraction in oil production this year. Negative oil prices reflect the

distortion in market and are expected to remain highly volatile

Highlights UAE oil production and prices

Residential property pricesUAE GDP growth

Source: Bloomberg, BIS, * IMF forecasts Economic Environment

2.9 2.9 2.9 2.9 2.8 2.93.0

3.23.1 3.1 3.1 3.1

3.0

0

10

20

30

40

50

60

70

80

90

2.4

2.6

2.8

3.0

3.2

3.4

Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1

2017 2018 2019 2020

US

D /

b

mn b

/d

UAE oil output (LHS) Brent oil (RHS)

-20

-10

0

10

20

30

40

50

Dec-10 Dec-11 Dec-12 Dec-13 Dec-14 Dec-15 Dec-16 Dec-17 Dec-18 Dec-19

Dubai Abu Dhabi% y/y growth

4.45.1

3.0

0.5 1.7 1.3

-3.5

3.3

-4.0

-2.0

0.0

2.0

4.0

6.0

2014 2015 2016 2017 2018 2019e* 2020f* 2021f*

% y/y growth

24

Divisional performance (Excluding DenizBank)

Retail Banking & Wealth Management

Emirates Islamic

• RBWM income grew 6% y-o-y due to higher net interest income

backed by increased volumes and higher core fee income

• Liabilities grew by 1% supported by customer campaigns and

customer advances were lower by 3% due to reduced activity

• Low cost CASA to deposit ratio increased to 77% from 75% in

previous quarter

• Cost to Income ratio improved to 24.9% from 27.4% y-o-y

• Relief measures rolled out for customers to minimize the impact

of ongoing COVID-19 pandemic

• EI total income was lower by 3% y-o-y due to a reduction in

non-funded and investment income partially offset by increase in

funded income supported by balance sheet growth

• Total assets reached AED 62.9 billion at the end of Q1-20

• Financing and Investing Receivables increased by 4% to AED 39

billion from end 2019

• Customer deposits at AED 44.8 billion broadly flat from end 2019

• CASA balances represented 66% of total customer accounts

compared with 63% at the end of 2019

• EI’s headline Financing to Deposit ratio stood at 87% and is

comfortably within the management’s target range

Balance Sheet Trends AED Bn Income Trends AED Mn

Balance Sheet Trends AED Bn Income Trends AED Mn

37.5 39.045.3 44.8

Q4 19 Q1 20

+4%

-1%

Financing receivables

Customer accounts

663 691 671

1,320 1,410 1,430

Q4 19Q1 19 Q1 20

1,983 2,100 2,101 0%

+6%

NII NFI

220125 173

444495 468

Q1 19 Q4 19 Q1 20

663620 641 +3%

-3%

NII NFI

Divisional Performance

45.4 43.8

153.2 155.0

Q1 20Q4 19

-3%

+1%

Loans Deposits

25

1,2641,283

Corporate and Institutional Banking

Global Markets & Treasury

• CIB income up 2% y-o-y due to a 7% increase in net interest income mainly

due to growth in lending activity

• Fee income declined 12% y-o-y due to lower lending fee, trade commissions

and treasury sales, partially off-set by increased investment banking activity

• The division continued to spend on digitization programs and technology to

enhance the Transaction Banking Services product offering

• Loans grew 3% during the year with stable momentum in lending activity

• Deposits grew 11% with continued focus on growing CASA balances

reflecting the Group’s aim to reduce the average cost of funding while

maintaining liquidity at an optimum level

• GM&T income declined 95% y-o-y primarily due to the decrease in net

interest income on account of lower interest rates. NFI declined 11% y-o-y

• Trading and Sales desks continued to deliver a solid performance despite

significant market volatility

• During Q1-20, AED 9.1 Bn of term debt issued in five currencies through two

public issues and private placements with maturities out to 20 years

• 78% of the term liabilities maturing in 2020 re-financed during Q1-20

covering maturities through to July; Only AED 2.6 Bn remaining to be re-

financed

Income Trends AED Mn

Income Trends AED MnBalance Sheet Trends AED Bn

269.4 276.6

147.2 163.5

Q4 19 Q1 20

+3%

+11%

DepositsLoans

422 351 373

1,184 1,199 1,271

Q1 19 Q4 19 Q1 20

1,5501,606 1,643 +6%

+2%

NII NFI

98 87

203

-72 -74

Q1 19

8

Q4 19 Q1 20

301

-65

14

-95%

-121%

NII NFI

Divisional performance (Excluding DenizBank)

Divisional Performance

26

Get in touch.

I N V E S T O R R E L A T I O N S

Emirates NBD Head Office I 4th Floor

PO Box 777 I Dubai, UAE

[email protected]

Tel: +971 4 609 3046

emirates nbd...largest financial institution in dubai, 3rd largest in the gcc leading retail banking...

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